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Farmland Partners expects up to $40m in asset sales in coming year

Chief executive Paul Pittman is adamant the REIT should remain a public company and suggested a final decision on whether to restructure would come within about two years.

The next year could bring as much as $40 million in farmland sales from NASDAQ-listed REIT Farmland Partners, according to its chairman and chief executive.

Speaking Thursday on the Denver-headquartered company’s first-quarter earnings call, Paul Pittman (pictured) said that, absent a significant improvement in its stock price or particularly accommodative financing, FP would likely not be an aggressive farmland buyer in coming months.

Asked if there were asset sales on the horizon, Pittman said the company is already working to increase the percentage share of specialty crops in its portfolio and continually examines the potential for asset sales.

“You could expect us to see something in the neighborhood of $20 million to $40 million in asset sales in the next 12 months, but that’s not really very many assets out of $1.2 billion or so of farmland overall,” Pittman said.

On the firm’s previous earnings call, Pittman attributed negative sentiment surrounding farmland values in part to inaccurate media coverage of agriculture. He struck a more optimistic tone on Thursday, stating that the relationship between declining commodity prices and agricultural land values is not a direct one and reporting that press coverage is starting to reflect an uptick in land values his firm has observed in key markets.

“Our view is that we’ve seen the bottom in land values in the Corn Belt. You are starting to see it come back up and starting to see that reflected in the popular press, which is clearly a positive for the underlying asset values.”

Still, Pittman said that FP continues to be frustrated by the gulf between its calculated net asset value of between $12 and $14 per share and its current stock price of around $8 per share, though he added he had no plans to liquidate the company’s portfolio any time soon.

Failing an increase in price towards $11.50 per share within two years, however, FP would likely have to “do something more drastic,” such as take the company private or sell all its assets through real estate brokers, he said.

“We spent a lot of money getting public,” said Pittman, who, elsewhere on the call stressed the high costs of re-entering public markets after a decision to leave has been finalized. “We believe that this asset class belongs in the public domain, we think it’s good for agriculture and rural America, we think it’s good for investors.”

For Q1 2018, FP reported net income of $500,000, an improvement on the $2 million in net losses reported for the same period last year. Its total farmland portfolio consists of 166,000 acres located across 17 US states, growing more than 30 major commercial crops.